Kunzman v. Enron Corp.

• Decision Date: 13 September 1995
• Docket Number: No. C 94-3044.,C 94-3044.
• Citation: 902 F. Supp. 882
• Parties: Harvey L. KUNZMAN, Plaintiff, v. ENRON CORPORATION; Enron Energy Companies, and Northern Natural Gas Company, Defendants.
• Court: U.S. District Court — Northern District of Iowa

902 F. Supp. 882

Harvey L. KUNZMAN, Plaintiff, v. ENRON CORPORATION; Enron Energy Companies, and Northern Natural Gas Company, Defendants.

No. C 94-3044.

United States District Court, N.D. Iowa, Central Division.

September 13, 1995.

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Lawrence Marcucci, Shearer, Templer, Pingel and Kaplan, West Des Moines, Iowa, for Plaintiff.

Neven J. Mulholland, Johnson, Erb, Bibb, Bice & Carlson, P.C., Fort Dodge, Iowa, and Kriste K. Sullivan and Janet L. Lachman, Enron Litigation Unit, Houston, Texas, for Defendant Enron.

ORDER REGARDING MOTION FOR SUMMARY JUDGMENT

BENNETT, District Judge.

                                                   TABLE OF CONTENTS
                   I. INTRODUCTION AND BACKGROUND ............................................. 889
                  II. FINDINGS OF FACT ........................................................ 890
                      A. Uncontested Facts .................................................... 890
                      B. Contested Facts ...................................................... 890
                III. STANDARDS FOR SUMMARY JUDGMENT ........................................... 891
                 IV. ANALYSIS ................................................................. 893
                     A. ADEA Claim ............................................................ 893
                        1. Kunzman's Age Discrimination Claim ................................. 893
                           a. The Analytical Framework for Claims of Age Discrimination ....... 893
                           b. The Prima Facie Case Under the ADEA in a Reduction in Force
                                Case .......................................................... 895
                        2. Kunzman's Prima Facie Case ......................................... 896
                        3. Pretext For Discrimination ......................................... 901
                     B. Age Discrimination Under Iowa Law ..................................... 902
                     C. Retaliation Claim ..................................................... 903
                        1. Analytical Framework for Retaliation Claim ......................... 903
                        2. Prima Facie Case ................................................... 904
                        3. Non-Discriminatory Reasons for Firing and Pretext .................. 904
                     D. Contract Claim ........................................................ 905
                  V. CONCLUSION................................................................ 909
                

This lawsuit arises out of the layoff and termination of Plaintiff during a purported reduction in force by his employer in 1993. Plaintiff's complaint alleges that age was a determining factor in his termination in violation of both federal and state law. Plaintiff further asserts that he was retaliated against, in violation of both federal and state law, for filing a discrimination complaint with the Iowa Civil Rights Commission. Finally, Kunzman asserts a breach of a lifetime oral contract under Iowa law against Enron.

Defendants have moved for summary judgment on each of Plaintiff's five claims.¹ Defendants assert that Plaintiff cannot make out a prima facie case of age discrimination. Defendants further assert that even if Plaintiff can demonstrate a prima facie case, they have a legitimate reason for Plaintiff's termination: a reduction in force at the place of Plaintiff's employment. In addition, Defendants contend that they did not retaliate against Plaintiff for the filing of a discrimination claim. Finally, Defendants assert that Plaintiff did not have a lifetime oral contract with them.

I. INTRODUCTION AND BACKGROUND

On May 11, 1994, Plaintiff Harvey L. Kunzman filed his petition in the Iowa District Court for Cerro Gordo County against his former employer Defendant Enron Corporation ("Enron"), alleging age discrimination, in violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621 et seq., and Iowa state law, arising out of his selection for layoff and subsequent termination from Northern Natural Gas' Ventura, Iowa, facility.² Kunzman further alleges that he was fired in retaliation for his filing a complaint of age discrimination in violation of the ADEA and Iowa state law. Kunzman also alleges an Iowa common law breach of an oral contract claim. On June 8, 1994, Northern Natural Gas filed a petition for removal of this case to federal court pursuant to 28 U.S.C. § 1441(b).

Enron has moved for summary judgment pursuant to Federal Rule of Civil Procedure 56(b) on all of Kunzman's claims. First, Enron asserts that Kunzman cannot make out a prima facie case on his age discrimination claim. Specifically, Enron argues that, in this reduction in force case, Kunzman is unable to demonstrate that age, and not some other factor, was the reason for his discharge. Second, Enron contends that it has offered a legitimate reason for Kunzman's termination, that it was part of a legitimate reduction in its work force, which Kunzman is unable to rebut. Third, Enron asserts that Kunzman cannot make out a prima facie case of retaliation nor can he show that Enron's reasons for terminating him were grounded by an intent to retaliate against him. Here, Enron argues that Kunzman was placed at risk before he filed discrimination charges and thus Kunzman is unable to demonstrate a nexus between the protected activity and a retaliatory action. Finally, Enron contends that Kunzman cannot substantiate a breach of a lifetime oral contract claim against Enron. On this point, Enron argues that the statements upon which Kunzman relies as establishing a lifetime oral contract are insufficient to create such a contract.

A hearing on Enron's motion for summary judgment was held on September 7, 1995. At the hearing Plaintiff was represented by Lawrence Marcucci of Shearer, Templer, Pingel and Kaplan, West Des Moines, Iowa. Defendant Enron was represented by Neven J. Mulholland of Johnson, Erb, Bibb, Bice & Carlson, P.C., Fort Dodge, Iowa, and Kriste K. Sullivan and Janet L. Lachman of Enron Litigation Unit, Houston, Texas. The parties have filed thorough and extensive briefs in support of their respective positions. Counsel were exceptionally well prepared for oral argument and the arguments were both spirited and informative. This matter is now deemed fully submitted.

II. FINDINGS OF FACT

A. Uncontested Facts

For the purposes of this summary judgement motion only, the court finds the following facts:

The record reveals that the following facts are undisputed. Plaintiff Harvey L. Kunzman was employed by Defendant Enron as an Operator II in its compression plant in Ventura, Iowa. Kunzman is over the age of 40. He was born on February 28, 1945. Enron's Ventura facility included the compression plant and a liquid natural gas ("LNG") storage facility. When Kunzman was hired by Enron, its layoff policy was based on seniority. In July 1992, Kunzman was informed that Enron was going to change its policy of determining or rating certain employees from a seniority/bumping system to a performance and skills based policy. In late 1992, Enron decided to automate its Ventura facility. The effect of the automation would be a reduction in the work force at Ventura. As of December 1992, thirty-six employees were required in order to operate the Ventura facility. A committee determined that after the Ventura facility was automated, only thirty employees would be required there.

In 1992, Marc Phillips was hired by Earl Berdine, the Vice-President of Operations for Northern Natural Gas Company, to perform a series of consulting sessions with Enron employees. During a March 1992 session Phillips referred to certain people as "traditionalists."

Tom Mertz was the supervisor of the compression plant, and Byron Wood was the supervisor of the LNG facility. At the direction of their own supervisor, R.R. McGillivray, Mertz and Wood made a list of employees who would be retained in their employment in the Ventura facility if a reduction in employment force decision was made at that time. McGillivray relied on the recommendations of Mertz and Wood as to what employees to place on the at risk list.³ The six remaining employees were deemed "at risk" of a layoff if a decision were made on that day. The other employees who were declared to be at risk were Tony Hauge, Will Roth, Michael Thompson, Larry Treloar, and Mr. Larson. On December 3, 1992, Kunzman was informed that he was "at risk." Kunzman was told that he could improve the chances of retaining his job if he improved his skills. Kunzman commenced a training program for corrosion technician in 1993, but did not finish the program.

On June 1, 1993, Kunzman filed a complaint with the Iowa Civil Rights Commission in which he alleged he was being subjected to age discrimination. On June 21, 1993, Kunzman and seven other employees at the Ventura facility were declared to be surplus to the employment needs at the Ventura facility. At that time Kunzman was 48 years old. In addition to Kunzman, the seven other employees who were declared to be surplus were: Larry Treloar, age 40; Tony Hauge, age 49; Will Roth, age 51; Michael Thompson, age 43; Mr. Larson, age 25; Kelly McLaughlin, age 35; John Overgaard, age 50; and Ted Hall, age 41. Larry Treloar was offered and accepted a transfer to Enron's Paulina location. Treloar was an Operator II at the Ventura facility and had less seniority, nine years, with Enron at the time of his transfer than did Kunzman. Treloar had received a disciplinary suspension from Enron in May 1991 for theft of company property.⁴ Kunzman was not offered a transfer to the Paulina location.

B. Contested Facts

1. Whether, during an employee training session, a consultant hired by Enron, Marc Phillips, divided employees into groups according to the employee's age.

2. Whether Phillips referred to a group of workers, age 40 and over, as "old type fundamentalists/traditionalists."

3. Whether Manager McGillivray told workers present at the employee...